H&M could soon charge you for returns

Inflation and rising shipping costs has forced retailers to implement return fees

H&M is getting ready to roll out a new store policy: charging customers for returning clothes.

During the Swedish fast fashion retailer’s quarter three earnings call on Thursday, H&M CEO Helena Helmersson told conference call participants that they will soon test run implementing “return fees in a few of the markets to see the response from the customers”.

“It all depends on how it’s received by the customer,” Helmersson told investors. “So that’s why we do a test to see if that is something to fast track.”

“If we’re about to roll it out, it will take some time,” she said. “We don’t have an exact time limit on it. But, again, let’s see when we see the evaluation of the test, whether this is the most impactful thing to do or not.”

In a statement to The Independent, a spokesperson for H&M said the company “will test a return fee in a few of its markets but it will only apply to online returns.”

“If a customer returns a product that was bought online in-store, there is no fee,” they said.

The retail giant also revealed its plans to cut costs by £160m ($177m) as it blamed its exit from Russia for decreasing profits. H&M paused all sales in Russia soon after the country’s invasion of Ukraine. The company also said it took a hit from higher energy prices and increased costs from customer deliveries.

H&M isn’t the only clothing store to charge customers for making returns. This summer, Zara began charging £1.95 to customers in the UK and $3.95 to those in the US for online returns made to a third-party drop-off point.

UK retailer Boohoo announced in July it will deduct £1.99 from each refund amount. Meanwhile, US customers will be charged $6 for online returns.

Abercrombie & Fitch has a $7 return fee for online returns sent by mail, but customers can return unwanted items they ordered online for free when they go to the store. American Eagle Outfitters charges a $5 shipping fee for refunds, and Pacsun deducts a $7 shipping fee from a customer’s refund.

At LL Bean, returns and exchanges made through US mail are $6.50 per package. Not only does Uniqlo not cover shipping costs for online returns, but it doesn’t accept in-store returns for online purchases either.

The rise in return fee policies comes as soaring inflation affects shipping costs. According to the National Retail Federation, total returns accounted for over $761 billion in lost sales for US retailers in 2021. In general, the total rate of returns has also increased from 18 per cent in 2020 to almost 21 per cent in 2021.